diff --git a/examples/telnyx-chatbot/README.md b/examples/telnyx-chatbot/README.md
index e5e9c27ae..ce0178893 100644
--- a/examples/telnyx-chatbot/README.md
+++ b/examples/telnyx-chatbot/README.md
@@ -9,7 +9,7 @@ This project is a FastAPI-based chatbot that integrates with Telnyx to handle We
   - [Features](#features)
   - [Requirements](#requirements)
   - [Installation](#installation)
-  - [Configure Telnyx URLs](#configure-telnyx-urls)
+  - [Configure Telnyx TeXML application](#configure-telnyx-texml-application)
   - [Running the Application](#running-the-application)
     - [Using Python (Option 1)](#using-python-option-1)
     - [Using Docker (Option 2)](#using-docker-option-2)
@@ -54,7 +54,7 @@ This project is a FastAPI-based chatbot that integrates with Telnyx to handle We
 4. **Install ngrok**:
    Follow the instructions on the [ngrok website](https://ngrok.com/download) to download and install ngrok.
 
-## Configure Telnyx URLs
+## Configure Telnyx TeXML application
 
 1. **Start ngrok**:
    In a new terminal, start ngrok to tunnel the local server:
@@ -76,6 +76,8 @@ This project is a FastAPI-based chatbot that integrates with Telnyx to handle We
      ```
    - In `templates/streams.xml`, replace `<your server url>` with your ngrok URL (without `https://`)
    - The final URL should look like: `wss://abc123.ngrok.io/ws`
+   - The encoding (`bidirectionalCodec`) should be `PCMU` or `PCMA` depending on your needs. Based on selected encoding, set the outbound_encoding in the `TelnyxFrameSerializer` in `src/pipecat/serializers/telnyx.py`
+   - The inbound encoding can be controlled from the application configuration for inbound calls and dial/transfer commands for outbound calls.
 
 ## Running the Application
 
diff --git a/src/pipecat/serializers/telnyx.py b/src/pipecat/serializers/telnyx.py
index 4535c730a..415674e69 100644
--- a/src/pipecat/serializers/telnyx.py
+++ b/src/pipecat/serializers/telnyx.py
@@ -25,11 +25,12 @@ class TelnyxFrameSerializer(FrameSerializer):
     class InputParams(BaseModel):
         telnyx_sample_rate: int = 8000
         sample_rate: int = 16000
-        encoding: str = "PCMU"
+        inbound_encoding: str = "PCMU"
+        outbound_encoding: str = "PCMU"
 
     def __init__(self, stream_id: str, encoding: str, params: InputParams = InputParams()):
         self._stream_id = stream_id
-        params.encoding = encoding
+        params.inbound_encoding = encoding
         self._params = params
 
     @property
@@ -40,9 +41,9 @@ class TelnyxFrameSerializer(FrameSerializer):
         if isinstance(frame, AudioRawFrame):
             data = frame.audio
             
-            if self._params.encoding == "PCMU":
+            if self._params.outbound_encoding == "PCMU":
                 serialized_data = pcm_to_ulaw(data, frame.sample_rate, self._params.telnyx_sample_rate)
-            elif self._params.encoding == "PCMA":
+            elif self._params.outbound_encoding == "PCMA":
                 serialized_data = pcm_to_alaw(data, frame.sample_rate, self._params.telnyx_sample_rate)
             else:
                 raise ValueError(f"Unsupported encoding: {self._params.encoding}")
@@ -62,18 +63,15 @@ class TelnyxFrameSerializer(FrameSerializer):
     def deserialize(self, data: str | bytes) -> Frame | None:
         message = json.loads(data)
         
-        if message["event"] == "start":
-            print(f"Start received encoding:{message['start']['media_format']['encoding']}")
-            self._params.encoding = message["start"]["media_format"]["encoding"]
         if message["event"] == "media":
             payload_base64 = message["media"]["payload"]
             payload = base64.b64decode(payload_base64)
 
-            if self._params.encoding == "PCMU":
+            if self._params.inbound_encoding == "PCMU":
                 deserialized_data = ulaw_to_pcm(
                     payload, self._params.telnyx_sample_rate, self._params.sample_rate
                 )
-            elif self._params.encoding == "PCMA":
+            elif self._params.inbound_encoding == "PCMA":
                 deserialized_data = alaw_to_pcm(
                     payload, self._params.telnyx_sample_rate, self._params.sample_rate
                 )